Type of Risk Description Mitigation plans Production risk Climate change: Unprecedented climate change like rainfall and heat is affecting milk production and leading to price fluctuations. The Company is adapting the latest technologies to tackle unpredictable weather conditions. One such initiative is ‘Grass to Glass,’ a technology-enabled approach to maintaining strict quality control throughout the milk value chain to ensure purity and assist farmers in dealing with varying climatic conditions and their impact on dairy production. Animal health and safety: Animal diseases can reduce cattle productivity by increasing the amount of time cows spend in lower-lactation phases and reducing the number of offspring available for replacements or sale. To mitigate the risk, the Company strives to supply high quality feed while also ensuring their general health and immunity. The Company provides free veterinary health services to reduce the impact of disease on cattle. Operational Risk Supply Chain Risk: Increasing fuel and logistics costs will have an impact on the Company’s overall revenue costs and result in an inadequate supply of the product. The Company is able to lower the effect of rising fuel prices and logistics costs through proper route planning and utilising maximum loading capacity of vehicles. Quality Control Risk: The risk of failure to meet the quality of products and other issues such as adulteration, contamination or tampering can lead to loss of consumer trust and also result in financial losses. The Company has made investments in cutting-edge research and development, setting up advanced manufacturing processes and planning preventive measures in an effort to mitigate risks for the customers. This has led to an improvement in the quality of the existing products and also, in the development of new products. Lack of Technological adoption: Manual monitoring, production and limited access to product information are time-consuming and may result in human errors in analysis, impacting the Company’s overall data management. The Company constantly makes use of a technology-enabled network to boost operational efficiency by streamlining processes, gaining proper access to data management throughout the value chain and generating value for all stakeholders. Volatility in raw material prices: Price fluctuations may increase the cost of raw materials, raising the production costs, which may result in additional losses for the Company. The Company has taken measures to reduce this risk by sourcing raw materials from different sources. Geographical concentration risk: Due to the Company’s reliance on some states, any unanticipated changes in their economies could have a negative impact on the Company’s growth. The Company is expanding its operations within the same states, instead of penetrating into new geographies by leveraging its strong distribution network and brand-building initiatives. Financial Risk Liquidity crisis: The Company may have difficulty managing the delivery of surplus milk due to the liquidity crisis and working capital constraints. The Company aims to maintain a strong working capital to be able to make immediate cash payments to the vendors. Compliance Issue: Regulatory Risk Because of the rapidly changing global regulatory environment, there has been a significant increase in regulatory scrutiny and stakeholder expectations regarding compliance. The Company has effective corporate governance procedures to make sure that its operations are in line with industry standards. 147 MDA | Statutory Reports
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